Abstract

Unbalanced bidding describes the process of contractors deliberately applying different mark-ups to individual items of work within a project. This practice has been shown to have the potential of yielding significant benefits to the contractor, including improved cashflow, higher compensation for escalation, and higher valuations for anticipated variations. A previous study on a hypothetical project indicated an improvement in profit in the order of 150% compared to balanced item prices. Research has indicated that unbalanced bidding is a widespread practice and yet many researchers have argued that it is unethical. This paper investigates the merits of these claims.